MasterCard: consumer spending dead in July

Image via CrunchBaseShoppers dug in their heels in July, bad news for the stalling economy and worse for struggling retailers. Excluding gasoline and autos, U.S. retail sales rose a meager 0.1% last month from June, according to figures released Thursday by MasterCard Advisors' SpendingPulse, which estimates spending in all forms including cash. Excluding autos, sales fell — 0.9%.

The Commerce Department releases its July spending figures Friday. The tepid month-to-month increase reported by SpendingPulse follows a 0.5% decline from May to June and a 2.1% drop from April to May.

Compared with a year earlier, however, July sales excluding autos and gasoline rose 1%. July's sales rose still more including gasoline — 1.4% — because gas price are up. The figures compare spending July 4 through July 31.

"It's growth, but it's pretty weak growth," says Kamalesh Rao, director of Economic Research for SpendingPulse.

With consumer spending — including major items like health care — accounting for 70% of U.S. economic activity, economists watch it closely for clues to what lies ahead. More...